‘India should ally with Vietnam, Taiwan, Japan to reduce dependence on Chinese supply chain’

India has emerged as a leading exporter of smartphones driven by financial support given by the government under the production-linked incentive (PLI) scheme. However, India’s mobile phone manufacturing remains hugely dependent on Chinese equipment and components. The recent informal restrictions by China on export of critical minerals and withdrawal of technical personnel has posed a challenge for India’s competitiveness in phone manufacturing. In an interview with DH’s Gyanendra Keshri, Founder and CEO of NxtQuantum Shift Technologies Madhav Sheth said India needs to develop local component ecosystems to reduce dependencies on China-dominated supply chains. Sheth, who led Realme India as CEO before launching his own venture, also dwells on the need for boosting investments in R&D and development of indigenous operating systems. Edited excerpts:    

India is one of the largest smartphone markets globally. However, there are hardly any Indian brands in this space. What do you think is the reason behind this?

The Indian smartphone industry has long been dominated by global players because of two factors—control of advanced component supply chains and ownership of the software layer. While Indian brands made early inroads in assembly and distribution, they lacked deep investments in R&D, operating system (OS) development, and vertical integration. As a result, most devices are rebranded imports, limiting differentiation and long-term competitiveness.

You have been associated with leading Chinese smartphone brands. Now you have launched your venture. Can you elaborate on the vision behind it?

My experience scaling global brands taught me one thing—India deserves more than just being a consumer market for imported technology. With NxtQuantum, the vision is clear: to create a sovereign, secure, and AI-native smartphone ecosystem designed in India, for the world. We’re building smartphones that aren’t just fast or stylish but are governed by Indian laws, hosted on Indian cloud infrastructure, and engineered to give users real control over their data. This isn’t about chasing trends—it’s about rewriting the rules of trust and transparency in technology.

What is the level of localisation in your product, both in terms of hardware and software?

We have recently introduced AI+ smartphone in the Indian market. It’s not about assembling in India—it’s about designing, engineering, and governing every layer of the technology stack here. The OS (NxtQuantum OS), system architecture, and UI are fully developed in India. Data is stored on MeitY-empanelled Indian cloud servers. For hardware, we’ve partnered with Indian manufacturing firms under the PLI scheme and are steadily increasing domestic value addition. While some components still rely on global supply chains—as is standard across the industry—we’ve implemented a zero-trust framework to ensure no backend or data-level access is possible from foreign suppliers.

China’s recent curb on rare earth magnets threatens to disrupt EV production. How vulnerable is India’s smartphone market to Chinese supply?

The global electronics industry, including smartphones, does have dependencies on China for critical components and raw materials. India is not immune to such supply-side shocks. That said, initiatives like PLI and investments in alternate supply chains are helping mitigate this risk.

What is the way out to reduce dependence on the Chinese supply chain

There is a need for a layered approach. We need to develop local component ecosystems (not just assembly units). There is a need to invest in R&D for alternative materials and components. Forging strategic alliances with countries like Vietnam, Taiwan, and Japan for supply chain diversification is required. We also need to encourage deep-tech startups in India that can innovate in semiconductors, batteries, and AI chips. With intent, investments, and policy support, India can move from being a market to being a maker of core technologies.

What is your view on the Production Linked Incentive (PLI) scheme? Can it help India reduce dependence on China, or do you see the need for a more innovative approach?

The PLI scheme is a great start—it’s helping bring global manufacturing to India. But to achieve true self-reliance, we need to go deeper: support component-level manufacturing and semiconductor fabs; invest in indigenous software and OS development, and foster an innovation ecosystem where Indian startups can thrive globally. PLI is necessary but not sufficient. India must pair it with patient capital for deep-tech innovation, R&D grants, and public-private collaboration for end-to-end ecosystem building.